MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

3x Mag-7, anyone?

rforno
in Other Investing

Yikes. IMO this means we're officially in the 'irrational exuberance' phase of the latest tech craze, I think.....

Per SA:

ProShares has filed with the U.S. Securities and Exchange Commission to launch a new leveraged exchange traded fund aimed at investors seeking amplified exposure to the market’s most influential technology-driven stocks. The proposed ProShares UltraPro Magnificent 7 ETF is designed for bullish investors looking to capitalize on short-term moves in the Magnificent Seven group.

According to the filing, the fund seeks daily investment results, before fees and expenses, equal to three times the daily performance of the Magnificent 7 Index.

Comments

  • MarkMark
    Hard pass here cowboy. Can one bet on the min/hr/day outcomes on Draftkings or similar?
  • yogibearbullyogibearbull
    edited February 9
    Since 2025, SEC has restricted leveraged ETFs/ETPs to +/- 2x. However, existing +/- 3x ETFs were grandfathered, so they do exist.

    ETNs weren't restricted, so new +/- 3x ETNs can still be issued - but ETNs are really debt or IOUs.

    But that hasn't stopped industry filings of even +/- 5x ETFs/ETPs. or the ProShares filing mentioned in OP for +/- 3x ETFs. So far, these filings have been summarily rejected by SEC. I think the industry is counting on some slipup at SEC or a reversal of previous SEC rules.
  • larryB
    There is an old saying in the car business that goes something something like this: “ There is an ass for every seat!” Some putz will buy these shares.
  • DrVenture
    ProShares UltraPro Short QQQ (SQQQ)

    3x Nasdaq short.

    - 74% for 2023
    - 50% for 2024
    - 53% for 2025

    + 2% YTD "Things are really looking up for Old Gil!"
  • Observant1
    edited February 9
    The 2x and 3x ETFs are for traders, not investors.
    I avoid 'em.
  • yogibearbullyogibearbull
    @DrVenture, these things are offered in +/- pairs.

    So, for QQQ, there is +3x TQQQ and -3x SQQQ. ProShares makes money on ERs for both. These were grandfathered under the 2025 SEC rules limiting leveraged ETFs to +/- 2x - there were fears then that rules may apply to all, but industry lobbied for grandfathering.

    ProShares could have shutdown SQQQ, but it may be keeping it because it cannot offer new -3x.
    https://schrts.co/egUZmGdp
  • DrVenture
    edited February 9
    Observant1 said:

    The 2x and 3x ETFs are for traders, not investors.
    I avoid 'em.

    Yeah, kinda figured that. Still, the recent upturn reminded me of the Simpson's character. Seems like something he might've bought into.

    "This iconic, ironic line belongs to Gil Gunderson ("Ol' Gil") from The Simpsons, an incredibly unlucky, desperate salesman known for failing miserably despite trying his best. It highlights his delusional optimism amid constant ruin, serving as a running gag about his sad life."

    @yogibearbull Thanks, interesting.

  • Sven
    We have a group of very wise and savvy investors here. Well done!
  • JD_co
    Ol Gil would have purchased a huge slug of 3x Mag 7.......on margin.

    And then he'd be sleeping on your couch.
  • Sven
    Wonder if Cathy Woods would invest in such leveraged products?
Sign In or Register to comment.